31.301
Purpose
FAR 31.301 sets the foundation for determining allowable costs for educational institutions performing government contract work, ensuring compliance with federal cost principles.
Overview
FAR 31.301 establishes the purpose of Subpart 31.3, which is to provide the foundational principles for determining the allowability and allocation of costs incurred by educational institutions when performing research, development, training, or other work under government contracts. This section clarifies that the subpart is specifically tailored to address the unique cost structures and accounting practices of educational institutions, ensuring that costs billed to the government are reasonable, allocable, and consistent with federal requirements. The guidance in this subpart is essential for both contracting officers and educational institutions to ensure compliance and proper cost determination throughout the contract lifecycle.
Key Rules
- Applicability to Educational Institutions
- The cost principles in this subpart apply specifically to contracts with educational institutions for research, development, training, and related work.
- Cost Determination Principles
- Establishes the framework for determining which costs are allowable and how they should be allocated under government contracts with educational institutions.
Responsibilities
- Contracting Officers: Must apply these cost principles when negotiating, administering, and settling contracts with educational institutions.
- Contractors (Educational Institutions): Must ensure their cost proposals, billings, and accounting practices align with the principles outlined in this subpart.
- Agencies: Oversee compliance and may audit or review cost determinations to ensure adherence to federal requirements.
Practical Implications
- This section exists to ensure consistency and fairness in how educational institutions charge costs to government contracts.
- It impacts daily contracting by requiring both parties to follow established cost principles, reducing disputes and audit findings.
- Common pitfalls include misallocating costs or failing to follow the specific guidance for educational institutions, which can lead to questioned costs or disallowed charges.